[2019] WASCA 70
General information, not legal advice.
Court of Appeal (WA)
2019-05-16
Buss P, Murphy JA, Beech JA, Pritchard J
Original judgment source is linked above.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION : CONNECTED IO LIMITED -v- PATERSON [2019] WASCA 70
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Citation : PATERSON -v- THE MINISTER FOR MINES AND PETROLEUM [2018] WASC 200
Administrative law - Procedural fairness - Application under s 111A of the Mining Act 1978 (WA) - Where Minister's advisors exchanged emails and held a meeting with one party to the application - Whether those communications involved any new matter that was credible, relevant and significant to the Minister's decision
Mining Act 1978 (WA), s 111A
Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72; (2005) 225 CLR 88
Connected IO Limited v Paterson [2018] WASC 200
Forrest & Forrest Pty Ltd v The Honourable William Richard Marmion, Minister for Mines and Petroleum [2017] WASCA 153; (2017) 51 WAR 425
Hot Holdings Pty Ltd v Creasy [1996] HCA 44; (1996) 185 CLR 149
Kioa v West [1985] HCA 81; (1985) 159 CLR 550
Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; (2001) 205 CLR 507
Re Minister for Resources; Ex parte Cazaly Iron Pty Ltd [2007] WASCA 175; (2007) 34 WAR 403
Singh v Minister for Immigration and Multicultural Affairs [2001] FCA 389; (2001) 109 FCR 152
June to September 2015: submissions process in respect of the s 111A application
(1) submitted that, before Leopard's exploration licence expired, it could and should have applied to the Minister for an extension of time for the licence, on the basis of the existence of exceptional circumstances;
(2) identified the exceptional circumstances, including: the less than two-year period for which it had held the licence; the $1.2 million, being six times the minimal expenditure, it had spent on exploration; its commitment to exploration in a period when other junior explorers were not meeting their commitments; its proving up of a 'JORC Code' compliant inferred mineral resource estimated at 1.5 million tonnes at an average grade of 3.8 g/tonne; and its hopes of entering into a joint venture to establish a gold mine on the land;
(3) submitted that Leopard had been given incorrect advice by the Department of Mines and Petroleum (the Department) about what it was required to do to renew the exploration licence, namely merely to pay the rent for the following year within 30 days of the date of expiry;
(4) submitted that, in the circumstances, the Minister should use his power under s 111A of the Act to refuse the other applications and then grant the Leopard application pursuant to s 59(6) of the Act.
[Y]ou are now invited to lodge a submission to be considered by the Minister, which would support why your application should not be refused pursuant to section 111A or alternately why [Leopard's application for an exploration licence] should not be granted pursuant to section 59(6).
Any submission must be lodged with the [Department] by 17 August 2015, with the understanding that it will be copied to [Leopard], and [its] submission will be copied to you.
All parties will then be allowed a further fourteen (14) days from the receipt of the copy of each other's submission to provide any comments they may wish to make thereon. Any such comments must be restricted to the contents of the opposing submission and any comments made will be copied to the opposing party.
All submissions received will then be reviewed by the Minister prior to a final decision being made.
You now have a period of 14 days from the date of this letter (7 September 2015) to make comment on the submission. Please note that your comment must be limited to the content of the attached submission.
Following receipt of comments made, those comments will be provided to the opposing party however no further comments should then be made. All submissions, comments and any other relevant evidence or information will then be submitted to the [Minister] for his consideration and determination of the above matter.
would set a dangerous precedent for the rest of the mining industry. Cases of clear incompetence such as this one are vastly different from previous cases in which tenement expiries have been overturned in the public interest.[11]
In its conclusion, the letter stated that to grant Leopard's application 'would inevitably send a message to the rest of the industry that tenement compliance is not obligatory, and that lapses in management can be remedied by a simple submission to the Minister', urging the Minister to 'avoid setting such a precedent'.[12]
If my application E37/1220 is allowed to continue and move towards grant, an industry best-practice gold exploration program will be conducted to continue advancing the Mission and Cables prospects, with a view to establishing a profitable mining operation in the future. This will be significantly more professional, transparent and better for the public interest than the work done by Leopard.
October 2015 to June 2016: further communications from Leopard in respect of the s 111A application
[T]he only way Leopard can now be afforded procedural fairness is if you agree to meet with Leopard's officers before you exercise your discretion to make a decision upon the competing applications.
Failing that a claim by Leopard for judicial review by the Supreme Court will be Leopard's only possible recourse.
The Directors of Leopard did not respond to [the Department's] initial contact, however, agreed to meet on 4 February 2016. In the meeting, [the Department] presented a diagram ... which detailed the submission exchange process that had taken place. Leopard appeared confused by the process, but indicated that it had not had an opportunity to provide comment to the last two submissions. [The Department] advised that the exchange process had concluded and it was open to Leopard to provide further submissions directly to the Minister's office and that a decision would be made as to whether it would be received into the process.
September 2016: further communications from Leopard in respect of the s 111A application
We believe the Minister should intervene in favour of [Leopard] because fairness requires it for the following reasons:
...
There is a very sound reason why the Minister is given absolute discretion whether to grant an [exploration licence] regardless of any warden's recommendation or failure to observe a requirement of the Mining Act. From time to time circumstances arise where a strict application of the processes of the Act would result in injustice which the Minister (who is entitled to take a broad view of the industry) is given the power to remedy (eg when RioTinto inadvertently failed to lodge an application in time, the Minister overlooked that failure so that he could protect RioTinto's title because of the company's genuine contribution to the industry).
We believe the example above demonstrates precedence and that our circumstances deserve the same level of discretion, in the interest of fairness and for the benefit of all the individual shareholders.
March 2015 - paid [exploration licence] rent 1 week overdue. Hasn't been returned. Presume process is still ongoing.
...
[The Department] provided incorrect verbal advice - Kalgoorlie office.
$1.2 million expenditure - Leopard.
Now 3 competing applications.
18 months on, no certainty.
...
Where is it in the process?
3 parties applied: [names redacted]
...
Was a ballot and supposedly he won the ballot?
Outcome of Warden's court process?
...
Now just between Leopard + [name redacted]?
[Leopard] to send thru corro + names of persons involved at [the Department]
What is the status of the tenement? Expired, pending, is it held by [name redacted] etc.
I have been back through the various letters to and from the [Department] and ministers [sic] office and have attached various for your records.
...
As discussed, we need to have this resolved for our shareholders as they are being unfairly affected considering the expenditure and subsequent value of the asset is being compromised by an oversight of the previous [text redacted]. Based on the previous expenditure being 6x the minimum requirement it is clear that the intention was never to let the [exploration licence] lapse and due to this oversight other opportunistic parties have taken the opportunity to take away the asset from [Leopard's] shareholders.
The [exploration licence] payment was paid within the timeframe verbally suggested by the [Department] at the time. To date that payment remains with the [Department] and [Leopard] has had 18 months of waiting with to and fro between [the Department] and [name redacted]. It is very frustrating for us as directors and also for our shareholders who have all but lost faith in our board on the basis we are not providing them answers.
Your assistance would be greatly appreciated. (emphasis added)
[T]he expiration of Leopard's exploration licence occurred through an oversight, or was brought about by allegedly incorrect advice from the Department and thus occurred through no fault of Leopard's; that Leopard had expended a considerable amount of money in exploration activities; the other applications (including the Paterson application) were from 'opportunistic' parties who, implicitly, were not genuinely seeking an exploration licence over the Land in order to engage in mineral exploration; and that in all the circumstances it would be unfair to Leopard not to grant it another exploration licence.
September 2016: the Department's briefing note to the Minister on the s 111A application
Should you be mindful of accepting the additional comments made by Leopard then these comments would need to be exchanged with the other affected party. These comments are viewed by [the Department] as additional comments to the submission exchange process and the affected parties have not had a right of reply ensuring procedural fairness.
Following consideration of the submissions lodged by all parties that you determinate [sic] to:
There was no reference, in the briefing note, to the communications between Leopard's officer and the advisors.
November 2016: the Minister's decision on the s 111A application
You will recall that Leopard lodged a submission with the [Minister] seeking his intervention pursuant to section 111A of the [Act] to have your application refused.
A submission exchange was facilitated by this Department at the request of the [Minister]. I note that you engaged fully in that process and lodged a submission and subsequently provided responsive comments to [Leopard's] submission.
Having carefully considered all submissions and responsive comments submitted in the process, the Minister refused the above application and has determined that Leopard's new application ... should proceed to determination.
(2) a recommendation from the mining registrar, if there is no objection to the application, or the mining warden, if there is an objection to the application, as to the grant or refusal of the exploration licence.[48]
(1) whether the power under s 111A(1)(c) of the Act was required to be exercised in accordance with the requirements of procedural fairness;
(2) if so, whether the Minister afforded procedural fairness to Mr Paterson in this case; and
(3) if the Minister had failed to afford procedural fairness, whether there was any reason why certiorari should not be granted to quash the Decision.
Is the power under s 111A(1)(c) of the Act required to be exercised in accordance with the requirements of procedural fairness?
Did the Minister afford procedural fairness to Mr Paterson?
(1) The advisors were principal policy advisors to the Minister, who worked in the office of the Minister; they were not officers of the Department.
(2) The meeting on 27 September 2016 was held in response to a request to meet with the Minister himself. By inference, the advisors were to meet with Leopard's officer on the Minister's behalf.
(3) It was apparent from the email communications that Leopard's officer sought to convey information to the Minister, through the advisors, for the Minister's consideration in making the Decision.
(4) It was apparent that information was provided to the advisors and they indicated that they were 'following it up'. To the primary judge, it was difficult to see how or why any 'follow up' might have occurred other than by the involvement of the Minister.
Is there any reason why the Decision should not be quashed?
(1) The primary judge erred in law by failing to positively find that the material identified in [58] above was relevant, credible and significant for the Decision.
(2) The primary judge erred in fact and law by finding that the material identified in [58] above was new or, individually or collectively, relevant, credible and significant for the Decision.
(3) The primary judge erred in fact by finding that the briefing note did not set out the reasons for the Decision.
(4) The primary judge erred in fact by finding that the subsequent Leopard communications were relayed to the Minister.
In VEAL, Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ noted, at 95 [14], that it was not useful to begin the inquiry about procedural fairness by examining what the Tribunal said in its reasons. Rather:
... as procedural fairness is directed to the obligation to give the appellant a fair hearing, it is necessary to begin by looking at what procedural fairness required the Tribunal to do in the course of conducting its review.
The joint judgment in VEAL then referred, at 95 [15], to the well-known statement of Brennan J in Kioa, at 628 - 629, as to the appropriate procedure when an administrative decision-maker has information available that is adverse to the interests of a person who will be affected by the decision. Brennan J enunciated, at 629, two propositions. First, 'in the ordinary case where no problem of confidentiality arises an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made'. Secondly, '[i]nformation of that kind creates a real risk of prejudice, albeit subconscious, and it is unfair to deny a person whose interests are likely to be affected by the decision an opportunity to deal with the information'. In VEAL, the joint judgment considered, at 95 - 96 [16] - [17], the meaning to be ascribed to the passage 'adverse information that is credible, relevant and significant to the decision to be made' in Brennan J's judgment. Their Honours said, relevantly:
... what Brennan J said about 'information that is credible, relevant and significant' takes its meaning from the point his Honour had made [at 628] only a few sentences earlier: that '[a]dministrative decision-making is not to be clogged by inquiries into allegations to which the repository of the power would not give credence, or which are not relevant to his decision or which are of little significance to the decision which is to be made'. Moreover, what is meant by 'credible, relevant and significant' must be understood having regard also to the emphasis that his Honour had given earlier in his reasons [at 622] to the fundamental point that principles of natural justice, or procedural fairness, 'are not concerned with the merits of a particular exercise of power but with the procedure that must be observed in its exercise'. Because principles of procedural fairness focus upon procedures rather than outcomes, it is evident that they are principles that govern what a decision-maker must do in the course of deciding how the particular power given to the decision-maker is to be exercised. They are to be applied to the processes by which a decision will be reached.
It follows that what is 'credible, relevant and significant' information must be determined by a decision-maker before the final decision is reached. That determination will affect whether the decision-maker must give an opportunity to the person affected to deal with the information. And that is why Brennan J prefaced his statement about a person being given an opportunity to deal with adverse information that is credible, relevant and significant, by pointing out that there may be information, apparently adverse to the interests of a person, which can and should be put aside from consideration by the decision-maker as not credible, not relevant, or of little or no significance to the decision to be made. 'Credible, relevant and significant' must therefore be understood as referring to information that cannot be dismissed from further consideration by the decision-maker before making the decision. And the decision-maker cannot dismiss information from further consideration unless the information is evidently not credible, not relevant, or of little or no significance to the decision that is to be made. References to information that is 'credible, relevant and significant' are not to be understood as depending upon whatever characterisation of the information the decision-maker may later have chosen to apply to the information when expressing reasons for the decision that has been reached.
The joint judgment concluded, at 96 [18], that it did not follow from the Tribunal's statement, in its reasons, that it gave no weight in reaching its decision to the letter or its contents, that there was no obligation to reveal the information to the appellant and give him an opportunity to respond to it before the Tribunal concluded its review. Further, the Tribunal's obligation to accord procedural fairness to the appellant was not discharged in consequence of the Tribunal deciding that it could decide the application for review on other bases.
Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ then turned their attention, at 97 [19], to whether the letter had or might have had some subconscious effect upon the Tribunal. Their Honours approved the observation of Allsop J in NIB Health Funds Ltd v Private Health Insurance Administration Council [2002] FCA 40; (2002) 115 FCR 561 at 583 [84] that 'the necessity to disclose [adverse information] in order to accord procedural fairness is not based on answering a causal question as to whether the material did in fact play a part in influencing the decision'. Asking whether, despite what was said in its reasons, the Tribunal may have been subconsciously affected by the information in the letter, distracted attention from the relevant inquiry. Their Honours noted:
'The relevant inquiry is: what procedures should have been followed? The relevant inquiry is neither what decision should the decision-maker have made, nor what reasons did the decision-maker give for the conclusion reached.'
The joint judgment held, at 99 [27], that the Tribunal should have informed the appellant of the substance of the adverse allegations in the letter. Although the Tribunal had sought to act fairly, the procedure it adopted was unfair. (italics in original, underlining added)
(1) the test, in order to show a breach of the requirements of procedural fairness, is that stated by Brennan J in Kioa, namely that the additional material is 'credible, relevant and significant';
(2) what was said in VEAL was merely a descriptive phrase which should not be taken to detract from that test, and should not be substituted for it; and
(3) her Honour erred in, in effect, substituting what was said in VEAL for the Kioa test.
Ground 1: did the primary judge fail to positively find that the subsequent Leopard communications were relevant, credible and significant?
At first blush, there does not appear to be any reason for concluding that such material was not 'relevant, credible and significant' for a decision under s 111A. In the present case, it is not possible to say whether the Minister took these matters into account. That is because the Minister did not provide any reasons for the Decision, and the briefing note preceded some of the ex parte communications. However, it is not necessary for Mr Paterson to show that the material played a part in influencing the Minister's decision.[92] It suffices that the new material cannot be described as material that obviously could be dismissed from further consideration by the Minister.
A decision maker is not required to put a party on notice of every piece of information which he or she receives. However, if a decision maker receives information adverse to a party, and which is 'credible, relevant and significant' to the decision to be made [Kioa 628 - 629 (Brennan J); VEAL [15] (Gleeson CJ, Gummow, Kirby, Hayne & Heydon JJ)] - in other words, information which cannot be dismissed from further consideration by the decision maker before making the decision [VEAL [16] - [17] (Gleeson CJ, Gummow, Kirby, Hayne & Heydon JJ)] - the party should be advised of at least the substance of that adverse information and given the opportunity to respond. The requirement to disclose adverse information in order to afford procedural fairness does not depend on whether it can be shown that the adverse material played a part (whether consciously or not) in influencing the decision [VEAL [18] - [19] (Gleeson CJ, Gummow, Kirby, Hayne & Heydon JJ)].
Ground 4: were the subsequent Leopard communications relayed to the Minister?
Ground 3: did the briefing note set out the Minister's reasons for the Decision?
Ground 2: did the subsequent Leopard communications contain new, relevant, credible and significant information? Ground 2: Leopard's submissions
We believe the example above demonstrates precedence and that our circumstances deserve the same level of discretion, in the interest of fairness and for the benefit of all the individual shareholders. (emphasis added)
[b]ased on the previous expenditure being 6x the minimum requirement it is clear that the intention was never to let the [exploration licence] lapse and due to this oversight other opportunistic parties have taken the opportunity to take away the asset from [Leopard's] shareholders. (emphasis added)
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
[1] Connected IO Limited v Paterson [2018] WASC 200 (primary reasons) [4], [47].
[3] Primary reasons [11]; GAB 27 - 30.
[10] Primary reasons [15]; GAB 36 - 39.
[14] Primary reasons [16]; GAB 41 - 42.
[18] Primary reasons [20]; GAB 73 - 83.
[20] Primary reasons [20]; GAB 80 - 81.
[23] Primary reasons [21]; GAB 55 - 58.
[25] Primary reasons [28]; GAB 52 - 53.
[27] Primary reasons [28]; GAB 49 - 50.
[39] Primary reasons [22] - [23]; GAB 73.
[40] Primary reasons [23]; GAB 73 - 82.
[41] Primary reasons [24]; GAB 80 - 82.
[51] Hot Holdings Pty Ltd v Creasy [1996] HCA 44; (1996) 185 CLR 149, 170, 178.
[57] The Act, s 111A(1)(b), read with s 111A(1)(c)(ii).
[59] Primary reasons [47]. The primary judge noted that the parties proceeded in argument on the basis that what was asserted was apprehended bias only: primary reasons [48].
[81] Re Minister for Resources; Ex parte Cazaly Iron Pty Ltd [2007] WASCA 175; (2007) 34 WAR 403.
[82] See Ex parte Cazaly [259] - [364].
[83] Forrest & Forrest Pty Ltd v The Honourable William Richard Marmion, Minister for Mines and Petroleum [2017] WASCA 153; (2017) 51 WAR 425 [101].
[84] Kioa v West [1985] HCA 81; (1985) 159 CLR 550.
[85] Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72; (2005) 225 CLR 88.
[86] Ex parte Cazaly [280] - [282].
[90] Leopard's submissions [5]; appeal ts 14 - 15.
[94] Primary reasons [82]; VEAL [17].
[95] Primary reasons [78], [83], [90].
[102] Leopard's submissions [42], referring to Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; (2001) 205 CLR 507 [92], [143], [317] and Singh v Minister for Immigration and Multicultural Affairs [2001] FCA 389; (2001) 109 FCR 152 [71], [72].
[110] Leopard's submissions [13]; appeal ts 21.
[114] Leopard's submissions [21]; appeal ts 37.
[122] Ex parte Cazaly [80], [90].
[123] The relevant passages of the email are set out at [29] above.
[130] Forrest & Forrest [108].
(2005) 225 CLR 88
(2017) 51 WAR 425
(1996) 185 CLR 149
(1985) 159 CLR 550
(2001) 205 CLR 507
(2007) 34 WAR 403
(2001) 109 FCR 152
(2002) 115 FCR 561